Public Information Only, Please!
The biggest challenge a "small guy" retail investor faces is relying on his own acumen and very limited resources to outperform "big guy" Wall St. professionals who have a wealth of analytical capability, cutting-edge systems support and hard-working staff at their disposal.
A fund manager generally has a team of in-house analysts who process information using proprietary models, sifting through mountains of market data with the objective of identifying those few gems that will make a portfolio shine. A retail investor, on the other hand, even with Internet communication these days, generally is privy to far less information and in far less a timely fashion.
In my own investing, I sit far from Wall St. and away from the crowd, picking up what relevant market information I can and trying to hone an "edge" that will allow me to realize 20% annual returns--a feat that most people would deem a near impossibility from the outset. Occasionally, I hear about private equity investments from friends and acquaintances who promise very attractive returns, even as high as 100% annually. Rather than pursuing these "inside track," relationship-driven opportunities, however, I generally decide to stick to my guns and proceed down the path of the public market investing. Deep within my own psyche, I view the public markets as being more "fair," despite the corporate tendency towards financial chicanery and connivery that has reared its ugly head in recent years with Worldcom, Enron, Krispy Kreme and the like. I like to play the investing game in what I perceive to be the most level playing field available, without the privileges and obligations inherent in the rarified world of investing with one's cronies by invitation only.
Over the years ahead, I hope to show how it is possible for retail investors relying solely on public information to identify and take advantage of investment opportunities widely available to everyone. By tuning into the market with appropriate focus and concentration and selecting niches where one has an edge over others, I believe it possible for diligent investors to outperform the averages.
A fund manager generally has a team of in-house analysts who process information using proprietary models, sifting through mountains of market data with the objective of identifying those few gems that will make a portfolio shine. A retail investor, on the other hand, even with Internet communication these days, generally is privy to far less information and in far less a timely fashion.
In my own investing, I sit far from Wall St. and away from the crowd, picking up what relevant market information I can and trying to hone an "edge" that will allow me to realize 20% annual returns--a feat that most people would deem a near impossibility from the outset. Occasionally, I hear about private equity investments from friends and acquaintances who promise very attractive returns, even as high as 100% annually. Rather than pursuing these "inside track," relationship-driven opportunities, however, I generally decide to stick to my guns and proceed down the path of the public market investing. Deep within my own psyche, I view the public markets as being more "fair," despite the corporate tendency towards financial chicanery and connivery that has reared its ugly head in recent years with Worldcom, Enron, Krispy Kreme and the like. I like to play the investing game in what I perceive to be the most level playing field available, without the privileges and obligations inherent in the rarified world of investing with one's cronies by invitation only.
Over the years ahead, I hope to show how it is possible for retail investors relying solely on public information to identify and take advantage of investment opportunities widely available to everyone. By tuning into the market with appropriate focus and concentration and selecting niches where one has an edge over others, I believe it possible for diligent investors to outperform the averages.
posted by Lloyd Sakazaki at 10:11 AM
1 Comments:
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